Military support for Ukraine and the fallout from the US-Israeli war against Iran are set to dominate Monday’s (16 March) foreign affairs ministers meeting. 

EU leaders agreed in December to disburse €90bn in soft loans to Ukraine, with an opt‑out from contributions for Hungary, Slovakia and Czechia, but Budapest is now blocking the legal act needed to actually raise and disburse the money.

Budapest is tying the veto to the dispute over halted Druzhba pipeline oil flows, saying it will block the loan until Russian oil transit to Hungary resumes.

“If Orban insists on his current course, he would be crossing a bridge that has never crossed before, which is highly problematic,” said a senior EU diplomat.
 
“There’s one plan [for the €90bn loan], the plan that the leaders agreed upon, which Orbán signed up for,” he added, saying that “the EU cannot function properly if an agreement made by the leaders, which everybody signed up to, is then suddenly undercut by one of the leaders.”

“If that’s the new way of working within the EU, we have a serious problem.” 

Against this backdrop and amid concerns over waning US aid and Patriot system shortages for Ukraine due to the Iran conflict, several EU members are eager for increased bilateral assistance to Kyiv.

“The issue of arms deliveries for Ukraine, in light of what’s happening in the Middle East, will come up,” said the diplomat. 

“We need more bilateral support from European member states for Ukraine, not only because it’s important in the framework of burden sharing — but also because Ukraine is not getting enough.” 

Iran and energy prices

On the Iran war, meanwhile, the economic effects of a prolonged conflict, particularly in the form of volatile oil prices, are worrying EU diplomats. 

Earlier this week, the EU’s 21 member states, which are also part of the International Energy Agency, agreed unanimously to make 400 million barrels of oil available from the IEA’s emergency reserve in a bid to lower oil prices and guarantee short-term supply. 

But energy analaysts have warned that collapsing production of oil and gas in the Gulf means that the 400 million barrels could secure supply for as little as a couple of months. 

Fears over the impact of increasing energy prices on EU economies come after the US eased sanctions on Russian oil and petroleum already loaded in vessels at sea, while the European Union maintains that now is not the moment to loosen sanctions on Moscow.

“The unilateral decision by the US to lift sanctions on Russian oil exports is very concerning, as it impacts European security. Increasing economic pressure on Russia is decisive for it to accept a serious negotiation for a just and lasting peace,” said EU Council president António Costa on X.

The EU has been criticised for its diplomatic impotence in response to the US and Israel’s efforts to impose regime change in Iran.

Of the EU’s major states, only Spain’s prime minister Pedro Sanchez, who has publicly denounced the war and refused to allow the US military to use its bases to launch attacks, has strongly criticised the Trump administration. 

Ministers are expected on Monday to add 19 ‌Iranian officials and entities responsible for serious human rights violations to the EU’s sanctions list. 

“What we can and will do is use our diplomatic contacts in the region, with Israel, with the Americans, to make sure that we get to an end of this, to this war,” said the senior diplomat.
 
“I do think it has become more clear that the Russia–Iran–China axis is a problematic one,” he added. 

Russia has long been a close ally of Tehran, while China, in 2021, signed a 25-year strategic partnership in which it promised to invest $400bn (€340bn) in Iran over 25 years in exchange for access to Iran’s oil. 

Elsewhere, ministers are unlikely to move forward with major new sanctions against Rwanda and the M23 militia group which it supports in a war in eastern DR Congo. 

Pulling the plug

Earlier this week, the EU Commission quietly pulled the plug on €20m in funding for a Rwandan Defence Force peacekeeping mission in Mozambique’s Cabo Delgado province, two weeks after the US Treasury’s decision to sanction the RDF as a whole for breaching the terms of a Washington-brokered peace deal last December by continuing to capture territory in eastern DR Congo.   

An EU official confirmed that “there are no plans to extend the support beyond May 2026.” 

The commission has paid €20m per month to the RDF since 2023 via the European Peace Facility, one of several peacekeeping missions led by the RDF in a neighbouring African country. 

India

India’s minister for external affairs, Subrahmanyam Jaishankar, will also hold a lunch meeting with EU counterparts, with defence cooperation set to be high on the agenda.

EU and Indian officials have said that they will negotiate an agreement on defence and security alongside a free trade deal that was signed in January.